Invoicing and Tax regulation in Netherlands

Netherlands initiated the modernization of its transaction processes in 2017 by implementing mandatory B2G e-invoicing. While B2C and B2B e-invoicing remain optional for now, many companies choose to make the transition earlier. They have recognized significant savings in terms of money, time, and reduction in manual errors, which are particularly prevalent in tax reporting. Given the standard VAT rate in the Netherlands at 21% and corporate tax rate at 25.8%, minimizing errors is crucial to avoid increased liabilities and penalties.

 

To ensure you’re meeting the requirements while optimizing your financial strategy, explore our comprehensive guide on (e-)invoicing, tax regulations, and digital reporting in the Netherlands.

 

Invoicing Regulations in the Netherlands

Invoicing regulations in the Netherlands are overseen by Dutch Tax and Customs Administration (Belastingdienst). Invoices are required whenever goods or services are sold, including transactions with other businesses or consumers. For VAT-registered businesses, invoices must be issued to the customer by the 15th of the month following the provision of goods or services, or sooner upon customer request. Moreover, VAT-registered businesses are obliged to issue a VAT invoice for all taxable sales.

At a minimum, the invoice needs to include:

  • Date of Issue;
  • Unique Invoice Number;
  • Supplier and Customer Information: Name, address, VAT number (BTW-number), and the customer's VAT identification number when providing goods or services to another EU country;
  • Description of Goods or Services;
  • Quantities and Unit Price of Goods or Services: excluding tax;
  • Transaction Date;
  • Total Amount and VAT Details: VAT rate applied, VAT amount payable, unless a reverse charge applies, the total amount payable, including VAT;
  • Additional Information: any discounts or rebates if not included in the unit price; reverse charge mechanism, if it applies; if any VAT exemptions apply and invoices for goods sold under the margin scheme should indicate that the margin scheme has been applied and that the VAT is not explicitly stated.

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    B2G Invoice Specifications

    For B2G transactions you have to issue e-invoices.

     

    B2B Invoice Specifications

    B2B invoices must be issued no later than the 15th day of the month following the month in which the goods or services were supplied.

     

    B2C Invoice Specifications

    For most B2C transactions you can issue simplified invoices, which require less information compared to full invoices.

     

    Simplified Electronic Invoice

    You can issue simplified invoices when the total amount including VAT does not exceed €100.

    A simplified invoice has to include:

  • Date of Issue;
  • Supplier’s information: The name and address of the supplier and VAT identification number (BTW-number);
  • Description of the Goods or Services;
  • Total Amount Payable: including VAT;
  • VAT Amount: If several VAT rates apply, the total VAT amount can be summed up if the individual VAT amounts are clearly linked to their respective transactions.

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    Invoice Archiving

    You have to archive invoices for a period of 7 years. This period starts from the end of the year in which the invoice was issued.

     

     

    E-invoicing Regulations

    Electronic invoicing, or e-invoicing, is the digital exchange of invoice information between a supplier and a buyer. In 2017, the Netherlands implemented mandatory B2G e-invoicing. While B2C, B2B e-invoicing remain optional, numerous companies have proactively embraced e-invoicing. The benefits of e-invoicing include improved efficiency, faster payments, and compliance with tax authority regulations, making it superior to traditional paper invoicing.

    Netherlands e-invoicing regulations align with Directive 2014/55/EU, which mandates public entities to be equipped to receive and process e-invoices that adhere to the European standard EN-16931. Furthermore, the Netherlands participates in the PEPPOL network, enhancing standardized cross-border e-invoicing within the EU through the use of electronic invoices and electronic invoicing. To support these requirements, the Dutch government utilizes Digipoort, a centralized platform designed for the receipt and processing of e-invoices in dealings with public sector entities.

     

    E-invoicing Process in the Netherlands

    In the Netherlands, businesses involved with the government agencies must register on the Dutch Government's e-Invoicing Portal. The process follows:

  • Completing a transaction: Dutch businesses are required to issue their invoices electronically when engaging with government entities. This is facilitated through platforms such as Digipoort or other approved service providers linked to the PEPPOL network.
  • Upon submission: E-invoices are processed via the Digipoort system, where they undergo validation to ensure they meet Dutch and EU standards for e-invoicing.
  • After validation: Once the e-invoice is verified, it is officially recorded as received by the governmental body. The issuer can then monitor and track the status of their invoices through the Digiport or the Logius service portals.
  • The customer receives the invoice: The receipt of the invoice is automated, and a confirmation is sent back to the supplier.
  • Customers or other interested parties can verify the transaction: Transaction verification is conducted through internal government systems, without a public web interface for this purpose.

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    Netherland’s Authority Responsible for E-invoicing

    The governmental body responsible for e-invoicing in the Netherlands is the Ministry of the Interior and Kingdom Relations.

     

    E-invoicing Formats

    The Netherlands' e-invoicing formats also align with the European standard EN 16931. The infrastructure for e-invoicing is supported by Peppol, which serves as the framework for interoperable exchange across Europe.

    E-invoicing formats commonly used in the Netherlands:

    UBL (Universal Business Language) Internationally recognized standard that includes a suite of XML-based business documents specifications.
    PEPPOL BIS Billing 3.0a Internationally recognized standard, providing a unified XML-based specification for electronic billing.
    NLCIUS Country-specific adaptation of the European standard, which includes additional requirements for e-invoicing in the Netherlands.

    E-invoice Validating

    Ensure that your e-invoices comply with the European standard EN 16931 as well as specific Dutch requirements. Further validation of e-invoices is not mandatory in the Netherlands, but you can use a qualified digital certificate. If employed, the certificate must be verified to ensure that the invoice remains unaltered and originates from a trusted source.

     

    E-invoice Archiving

    In the Netherlands, you must archive e-invoices for a minimum period of 7 years. The archiving period starts from the end of the year in which the invoice was issued. Archiving abroad is permissible under certain conditions, provided that the storage facility is located within the European Union or in a country that offers an adequate level of data protection, consistent with EU standards.

     

     

    Tax Regulations

    The standard VAT rate in the Netherlands is 21% and applies to most goods and services. A reduced VAT rate of 9% applies to essential goods and services, such as food, books, and medicines. An exception are intra-Community supplies of goods with 0% VAT rate.

     

    Corporate Income Tax

    The standard corporate income tax rate in the Netherlands is 25.8%. There is a reduced corporate tax rate of 19% for the profits up to €200,000.

     

    VAT on Digital Products

    In the Netherlands, digital products such as software, digital media, e-books, and online services are subject to the standard VAT rate of 21%.

     

     

    VAT Payments and Returns

    In the Netherlands, businesses are required to file a VAT Return with Dutch Tax Authority (Belastingdienst) to declare the VAT they have collected and the VAT they have credited for business purchases. The VAT Return should detail:

  • VAT collected on sales,
  • VAT credits for VAT paid on business purchases.

    • The net VAT amount, which is the difference between the VAT collected on sales and the VAT credits on purchases, is indicated on the VAT Return and must be paid to the Dutch Tax Authority (Belastingdienst). If the VAT credits exceed the VAT collected, the business can claim a refund.

    The reporting frequencies are:

  • Monthly: Reports must be submitted by the last day of the month following the reporting period.
  • Quarterly: Reports must be submitted by the last day of the month following the quarter's end.
  • Annually: Reports must be submitted by the end of March of the year following the tax period.

    • HMRC encourages the electronic filing of VAT Returns and Payments through its online portal (Belastingdienst Online).

     

    VAT Registration Thresholds

  • VAT registration threshold for domestically established businesses is €25,000.
  • For EU-based businesses engaged in distance selling of goods or services to the Netherlands consumers, the threshold is €100,000.
  • Non-EU businesses selling into the Netherlands have no VAT registration threshold; they are required to register for VAT immediately upon beginning sales of goods or services to Dutch consumers.

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    E-invoice Requirements

    In the Netherlands, e-invoice requirements adhere to EU standards and demand components such as:

  • Date of issuance;
  • Unique Invoice Number;
  • Supplier and Customer Details: Full names, address and VAT number, for the customer only if applicable.
  • Description of Goods or Services;
  • Quantity and Unit Price of Goods or Services: excluding VAT,
  • Date of Supply;
  • VAT Information: VAT rate applied, total amount of VAT.
  • Payment Terms: any discounts, VAT exemption reference, reference to reverse charge;
  • Total Invoice Amount.

    • For businesses with repeating customers, setting up recurring invoices can streamline the billing process by automating regular, automatic payments.

     

    Utilizing invoicing software can significantly benefit businesses in creating, sending, and managing e-invoices in compliance with the Netherlands regulations. These tools not only help in generating professional invoices but also in streamlining the invoicing process, improving cash flow, and ensuring that payments are received on time.

    See how Space Invoices can help.

     

    B2G E-invoice Specifications

    B2G e-invoicing is mandatory. It is the most regulated sector, complying with the EU directive 2014/55/EU and demanding submission of invoices through Digipoort.

     

    B2C E-invoice Specifications

    For most B2C transactions you can issue simplified e-invoices, which require less information compared to full invoices.

     

    Simplified E-invoice Requirements

    You can issue simplified e-invoices for transactions where the total invoice amount, including VAT, does not exceed €100.

    Simplified e-invoices include:

  • Date of Issue;
  • Supplier’s Identification: Name and adress;
  • Description of Goods or Services;
  • Total Amount Payable, including VAT;
  • VAT Amount.

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    Digital Reporting

    Businesses registered for VAT in the Netherlands are required to submit a VAT Return electronically via the Dutch Tax and Customs Administration's (Belastingdienst) online service. This can be done directly, through business software that integrates this functionality, or through a tax agent.

    Additionally, businesses are encouraged to maintain electronic records of all transactions to meet the Inland Revenue Department (IRD) standards. These records are vital for audit purposes and must be retained for a minimum of seven years.

     

    SAF-T

    SAF-T is not mandatory in the Netherlands.

     

    Real-Time Reporting

    Real-time reporting in the Netherlands is advancing towards alignment with the European "VAT in the Digital Age" (ViDA) initiative. This involves upgrading e-invoicing systems to facilitate real-time or near real-time monitoring of transactions. While not currently mandatory, the Dutch system is evolving to potentially require that invoices be issued, transmitted, and received in a structured electronic format that is conducive to automatic processing.

     

    Data Breaches

    If a data breach occurs, you must notify the Dutch Data Protection Authority (Autoriteit Persoonsgegevens, AP) within 72 hours of becoming aware of the incident. If the breach poses a significant risk to individuals' rights and freedoms, affected individuals must also be notified without undue delay.

     

     

    Penalties

    For non-compliance with invoicing requirements, you may be subject to a fine of up to €5,514.

     

    Tax Penalties

  • If VAT is paid within or after the leniency period but is late or incomplete, a fine ranging from 3-10% of the VAT due will be imposed, with a minimum fine of €50 and a maximum of €5,514.
  • In cases where late payment is due to negligence or fraud, the fine can be as high as 100% of the VAT due.
  • For late filings, fines will range between €68 and €136 per VAT return.

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    Streamline Global Invoicing and Digital Reporting with Space Invoices

    One way to comply with (e-)invoicing, tax and reporting requirements in the Netherlands is to use a credited provider like Space Invoices.

    You will be able to:

  • Utilize a single API for current and future worldwide compliance, including in the Netherlands
  • Support and upsell your clients globally, including in the Netherlands
  • Become the one-stop shop for current and future clients
  • Streamline processes to save time and reduce costs, while also eliminating manual errors
  • Rest assured all documents are properly archived and reported to the relevant authorities
  • Achieve rapid integration, typically completed in less than a week.

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    Having questions about how to achieve compliance in the Netherlands?

    We are here to assist.

     

     

    This guide is provided by Space Invoices and does not constitute professional tax advice or opinions tailored to the specifics of any particular business or situation. Space Invoices does not accept responsibility for the accuracy or applicability of the content within this guide. Tax regulations, e-invoicing requirements, and digital reporting standards are subject to frequent changes and complex interpretations that require validation by qualified tax professionals. It is the user's responsibility to evaluate the relevance and accuracy of the information provided and to consult appropriate professionals. Space Invoices does not offer professional tax opinions or advice through this publication.

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